VW, the Future & the End of “Conventional” Jobs

"In order to become a global provider of sustainable mobility, we are pressing ahead with future projects such as electromobility, digital connectivity and new mobility services, equipped with the necessary resolve and financing.

Blog Post: 11/22/2016

Gary S. Vasilash

Editor-in-Chief, Gardner Business Media, Inc.

"In order to become a global provider of sustainable mobility, we are pressing ahead with future projects such as electromobility, digital connectivity and new mobility services, equipped with the necessary resolve and financing. At the same time we are investing more selectively and are setting clear priorities. Volkswagen Group will refine its focus – also with regard to investments and development expenditures."

That was Matthias Müller, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, after last week’s VW Supervisory Board meeting.

Note that he ticks the boxes for each of the prevailing areas of automotive interest:

· Electromobility

· Digital connectivity

· Mobility services

If there is any more clear statement of how automotive OEMs just aren’t in the business of designing, engineering, producing, and selling cars and trucks, I’ve yet to see it.

Now in the particular case of Volkswagen Group, which is still dealing with the financial and reputational repercussions of the diesel defeat device debacle, there is a need for it to pay particular attention to finances. When it is facing a $14.7-billion settlement in the U.S. alone, the company really has to watch where and how it invests.

Coincident with the Supervisory Board meeting last week there was a pact signed by the Board of Management and General Works Council of Volkswagen, focused on achieving and maintaining profitability.

Now here’s the telling part. According to a statement from the company, “Specifically, the pact for the future is to have a positive impact on earnings of €3.7 billion per year by 2020. Of this figure, the German facilities will account for €3.0 billion. Over the next few years, investments of about €3.5 billion in future-oriented areas of these facilities are planned. This will result in the creation of 9,000 jobs.”

Note well the term “future-oriented areas.”

That’s because the statement goes on to say: “On the other hand, there is to be a loss of up to 23,000 jobs in conventional areas in Germany, which will be accomplished in a socially compatible way.”

There’s always that “other hand.”

Which in this case means that “conventional” jobs—presumably that includes some of those that aren’t going to be pushing forward with electromobility, connectivity or mobility services—are going by the wayside.

Simple math has it: 23,000 minus 9,000 equals a whole of people who aren’t part of the future.